The Hong Kong dollar continued to hover near its linked exchange rate of 7.80 to the US dollar on Thursday, prompting fears of further fund outflows. The local currency shuffled between 7.7995 and 7.7998 against the greenback during the session, compared to 7.7998/99 in late Asian trade on Wednesday. "People are nervous as the USD/HKD spot rate has recently been trading above 7.7995. That level triggers position-squaring in the forwards market," said a dealer at a European bank.

Copyright Reuters, 2005